Families of disabled Coloradans question overhead costs in benefits

Parents of children with disabilities have reached a boiling point in frustration over murky costs

Noah Warden, 7, who has cerebral palsy, lies on one of the mats in the living room at the family's home, Jan. 20, 2016. The Warden family has been fighting to see some light shed on how their son's benefits are used. (Brent Lewis, The Denver Post)

Stacy Warden slides the last spoonful of oatmeal and apple sauce into her 7-year-old son's mouth, then returns, frowning, to the paperwork spread across her kitchen table.

The documents show Noah, who has cerebral palsy and does not talk or walk, used every penny of his annual disability benefits, capped at $36,400.

Except he didn't, according to Warden, who keeps a meticulous accounting of her son's state Medicaid funding. The records from Noah's case manager at Imagine! — one of 20 community-centered boards in Colorado where children and adults with disabilities access tax-funded therapy and care — say Noah used $14,600 in respite care in one year, which Warden knows did not happen.

Stacy Warden caring for her son Noah, who has cerebral palsy, at the family's home in Broomfield on Jan. 20, 2016. The Warden family struggles to make ends meet. (Brent Lewis, The Denver Post)

She knows because Noah's grandmother is his respite caregiver, providing relief to his parents when they need a break from caring for a child with severe needs 24 hours a day. It's common for grandparents, grown siblings and other relatives to become respite caregivers.

Noah's grandmother did not bill for even an hour in 2014, in hopes the family could put all of Noah's money toward remodeling a bathroom for accessibility.

The funding discrepancy — which Warden has yet to reconcile with the board — is a single frustration among many for parents relying on Colorado's amorphous system that funds children and adults with intellectual and developmental disabilities. They complain the system is so opaque, even "secretive," that they cannot see how much money their children have used.

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Also, they are fed up with the number of middle managers between their children and state and federal dollars.

"Yes, they are frustrated. It's a cumbersome, bureaucratic process that the department has recognized as such," said Barbara Ramsey, director of the state's intellectual and developmental disabilities division at the Department of Health Care Policy and Financing.

Community-centered boards, which serve as case managers for people with disabilities, receive $325 million in funds each year — 90 percent from taxpayers. The Denver Post found that for some services, just half of the dollars are spent directly on people's care.

"The system should fund people, not programs," said Marcia Tewell, executive director of the Colorado Developmental Disabilities Council. Reducing spending on overhead would mean serving more people on years-long waiting lists, she said.

Closed books

The boards' financial books, including their annual budgets, are closed to the public and have been since the groups were created by legislation in the 1960s. Their contracts with service providers who offer therapy, respite care, residential care and live-in aides as subcontractors are not revealed.

Chris Patton, center, holds hands and jumps in the air while dancing with Janel Poffiel, left, and Sio Straka at the Rhythm Sanctuary at the Sons of Italy, Feb. 25, 2016. (Andy Cross, The Denver Post)

A Denver audit that looked at only a sliver of the funding — the city's mill levy dollars flowing into Denver's community-centered board, Rocky Mountain Human Services — found a long list of "shameful" spending, including salary and benefits for the former director nearing $500,000 and free Costco memberships for employees.

There has not been a state audit focused on Rocky Mountain or any other board, and board executives and their lobbyists fought this month to strike a section of proposed legislation that sought to place the boards under the purview of the open-records act. A Senate committee moved the bill forward Wednesday without the open-records provision, though it still would require state audits at least every five years.

Board executives said the majority of families they serve are content and that only those who are aggravated are making noise. Also, they said their contentious relationship with some families is due at least in part to federal rules that hamper flexibility in how families can spend benefits and not due to local policies.

"It saddens me that there are families that are this frustrated," said Beverly Winters, executive director of Developmental Disabilities Resource Center, the community-centered board in Lakewood. "I know we've got some families that have not had helpful experiences and I don't want to discount that, but we have many families who are very supportive."

Dozens of parents, however, have crowded rooms at the state Capitol in recent weeks with children in wheelchairs and homemade signs pleading for help.

"This is a jobs program — the disability industrial jobs complex," said Maureen Welch, whose 8-year-old son has Down syndrome. "Everybody makes money off the backs of our kids."

"It's turned into this enormous bureaucracy and the dollars don't make it down to the people," said Rob Hernandez, a former state senator who provides residential care for two adults with disabilities in his home.

Some were afraid to speak publicly against the system for fear their case manager would "blackball" them. "They break you down to a point where you just can't fight anymore," Warden said. "There are times when you are so defeated you ask how much more mental anguish can we put ourselves through. They try to exhaust you."

Requests disputed

Every request to spend Noah's benefit money is a battle, Warden said.

She requested anti-suffocation pillows and then pillow cases in January 2015, $60 for 50 disposable cases. Imagine! denied the request. Warden appealed and won in front of a judge last October. The pillow cases finally arrived last January — a year later.

Her request for "sensory clothing" to help Noah's rash turned into a months-long battle, still ongoing, after Imagine! wanted Warden to pay the difference between the special clothing and typical boys' sweat pants from Target.

The list goes on.

She asked for a $700 Vitamix to blend Noah's dinner because he can't chew solid foods — he eats whatever the family is eating for dinner, in blended form. It was approved in January, yet it took the high-powered blender two months to arrive. She asked for a British-made chair attachment so she could roll Noah around the house. Imagine! said she wasn't allowed any out-of-country purchases, and the dispute remains unsettled.

"This is a very 'Mother-May-I' system," she said. "And most of the time, the answer is 'No.' "

Noah technically died in the womb, constricted by the umbilical cord around his neck. For 13 minutes after his birth, he had no heartbeat or breath.

Hospital staff revived him, but he was on life support for days. The day they turned off the machines, Warden and her husband, Chris, held their first baby in their arms, waiting. But instead of dying, Noah began to grow stronger, and 45 minutes later, he took his first bottle.

They've been fighting for him ever since. Chris, a truck driver, takes over caring for Noah and his 4-year-old brother Luke when he finishes work so Stacy can concentrate on e-mails and phone calls about Noah's therapy and benefits.

Noah can't grasp toys; he grunts to get his mother's attention as he lies on the living room floor, surrounded by stuffed animals and play food for his little brother's pretend kitchen. An animated movie with music will soothe him, sometimes.

"You think if your child is alive, you can fix it," Warden said. One of their favorite sayings is stenciled on the wall above the stairway in their Broomfield home: "Every day holds a possibility of a miracle."

Billing, spending gap

The state Medicaid department does not require community-centered boards or the service agencies they use to report their overhead costs. A 2009 state review done by outside contractors determined the administrative costs, including salary and travel, at boards averaged 26.4 percent.

The true cost of the entire system Colorado uses to deliver services to the disabled is obscure, when considering the boards' lobbying expenses and the operating costs of the service agencies hired to send therapists to families' homes.

The Post examined the difference between what service agencies bill the state Medicaid department compared to what they pay their caregivers and therapists, determining caregivers may receive little more than half of the funding.

The state posts online the hourly rates it will reimburse for specific services — $20 per hour for respite care, $63 for case management, $80 per hour for horseback riding therapy.

That's the amount the state Department of Health Care Policy and Financing will reimburse to a community-centered board or service provider agency when it submits a claim. The understanding is that some of the payment goes toward the board or agency's operating expenses — their building, salaries, electric bill and other costs, said the state's Ramsey.

Service provider agencies, which employ therapists and caregivers, can choose to bill Medicaid directly, or can subcontract with the board and have the board bill Medicaid. Boards also can employ their own caregivers and therapists as staff, meaning they can bill Medicaid for case management as well as for services. Developmental Disabilities Resource Center, for example, has a staff of 180 caregivers. They are paid from $12 to $15 per hour.

The Post talked to respite care providers — who relieve parents so they can grocery shop and run errands — earning from $10 to $12 per hour. That means they are receiving as little as half of the $20-per-hour Medicaid rate.

Phil Morgan, whose teenage son has severe autism, said the boy's caregiver was paid half of Medicaid's going rate. He was so angry when he discovered this, the Westminster dad called the state to complain about the pay and the quality of care.

"You get these really low-level people that are really desperate," he said. "I've got a nonverbal 17-year-old boy — if something were to happen in our house when it's just him and a provider, he would never be able to tell me.

"They are taking so much and paying so little that nobody will apply for these jobs. These middlemen are just raking in the tax dollars, and nobody is paying attention."

June Lamb's 8-year-old granddaughter, who suffered a severe brain injury when she was shaken as a 2-month-old, has a respite caregiver who is her uncle. He is paid $10 per hour, and when he works an overnight shift, he makes $97, even though the agency he works for can bill Medicaid $197 for an overnight shift.

"It's irritating," Lamb said of the difference in pay, calling the entire funding system a "big secret."

Service agencies, for their part, say the overhead costs involved in employing caregivers and therapists — including taxes, health insurance and vacation — are so high they can hardly afford workers and complain of a shortage in caregivers.

A worker whose hourly wage is $11.30 costs the agency $20.20 per hour, according to Alliance, the trade and lobbying organization for community-centered boards and service agencies.

Taking control

Anne Patton has learned more about the overhead costs of the disabilities system than most parents since cutting the middleman out of her son's care almost two years ago.

Chris Patton, 32, has autism and lives in his own Denver home with round-the-clock care. He uses a tablet called a DynaVox to communicate, pushing buttons that say "Hi, my name is Chris," or "Take a bath." Rhythm is his thing — the Gipsy Kings are on his stereo, he bounces almost daily on his backyard trampoline, and he dances weekly at a rhythmic dance sanctuary. He sells T-shirts that quote his poetry: "I am extra vast and lopsided," is among the most popular designs.

Before his mom took over as his service provider, the family's community-centered board — Rocky Mountain Human Services — linked the family with an agency to provide care for Chris in his home. The staff's salaries, Patton learned, totaled $32,000 per year, about half of Chris' allotted $58,000 in annual benefits for residential care. That means 55 percent of Chris' benefit money made it to his caregivers.

The service was poor, with caregivers frequently burning out, Patton said. Among the events that pushed her to get certified as her son's "service provider agency" was stopping by one day to find a caregiver passed out drunk, the front door open and Chris unattended.

Patton is now approved to provide in-home services, transportation and a day program, although her only client is her son. She hires and trains his caregivers, who spend 2½ days straight with Chris and have the rest of the week off.

Her overhead costs, including taxes, worker's compensation and liability insurance, total 12 percent.

When Chris' parents got him on the state wait list for residential services at age 14, he was No. 278. He began receiving residential services seven years later, at age 21.

Chris, who keeps his long, light-brown hair in a ponytail and often wears one of his poetry-tagged T-shirts, is a "really cool guy, but he is intense," said his mom. That's why his previous caregivers burned out quickly working 40-hour workweeks.

Now, with Patton as a service provider, the change has been "magical," she said. "It has made such a difference in this guy's life, I can't even begin to tell you," she said.

Not all families — because their Medicaid plan doesn't allow it or because their own age prevents them from taking on the tasks of hiring, training and Medicaid billing — have the same flexibility. The system needs reform, Patton said.

"People have not paid attention," she said. "It's a marginalized group of people, so people don't want to think about it. They assume they are getting help." But, she said, many don't realize the system is making "money off the backs of people that really need support."

The legislature created community-centered boards 50 years ago as one-stop shops for people with disabilities. Before the boards existed, families gathered in church basements and community halls, collaborating to hire therapists and caregivers. Now, instead of shopping on their own for services, a case manager at their local board helps them.

After five decades, as the board system has grown to a $325 million annual operation, families say it's time to re-examine the system. Board executives said it could run more efficiently with federal reform.

Imagine!, based in Lafayette, receives $33 million annually in operating revenue. It spends $65,000 on lobbying and $14 million on salaries for staff who provide case management and other services.

The community board works with 49 agencies that provide services to families.

Mark Emery, chief executive of Imagine!, said he hopes reforms will put more decision-making "in the hands of families" so they can select the best services for them. Current rules place caps on services, resulting in families topping out in one area and leaving money unspent in another. Instead, Emery said, he wishes families could see their total benefit amount and have the freedom to shop around.

The state has asked the federal Medicaid department for permission to give families the option of hiring their own caregivers, who would receive payment from a state intermediary.

"It's the worst-designed system I have seen in the last 30 years," Emery said. "I don't think it's a very economical system."

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